BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 923|
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THIRD READING
Bill No: SB 923
Author: De León (D)
Amended: 5/3/11
Vote: 21
SENATE LABOR & INDUSTRIAL REL. COMMITTEE : 6-0, 4/27/11
AYES: Lieu, Wyland, DeSaulnier, Leno, Padilla, Runner
NO VOTE RECORDED: Yee
SENATE APPROPRIATIONS COMMITTEE : 9-0, 5/26/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
SUBJECT : Workers compensation: official medical fee:
schedule: physician services
SOURCE : Author
DIGEST : This bill requires the Administrative Director
(AD) of the Division of Workers Compensation, by January 1,
2013, to adopt an Official Medical Fee Schedule (OMFS) for
physician services based on the resource-based relative
value scale. This bill requires the AD, on or after
January 1, 2014, and no less frequently than biennially, to
revise the OMFS.
ANALYSIS : Existing law establishes a workers'
compensation system, administered by the AD of the Division
of Workers' Compensation (DWC), to compensate an employee
for injuries sustained in the course of his/her employment.
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Existing law requires the AD, after public hearings, to
adopt and revise periodically an official medical fee
schedule that establishes reasonable maximum fees paid for
medical services, other than physician services, and other
prescribed goods and services, in accordance with specified
requirements.
Existing law, notwithstanding the above provisions, further
authorizes the AD, after public hearings, to adopt and
revise, no less frequently than biennially, an official
medical fee schedule for physician services, in accordance
with specified requirements.
This bill requires the AD, by January 1, 2013, to adopt an
OMFS for physician services based on the resource-based
relative value scale. This bill requires the AD, on or
after January 1, 2014, and no less frequently than
biennially, to revise the OMFS.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Annual updating of
OMFS
- initial implementation $500 to $700
Special*
(rule making and study)
- biennial revision Up to
$100 Special*
Change in reimbursement Unknown, increase or
decrease over General/
rates for medical services current reimbursement
rates paid by Special
employers, including the state
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* Workers' Compensation Administrative Revolving Fund
SUPPORT : (Verified 5/31/11)
California Occupational Medicine Physicians
Kaiser Permanente
U.S. Health Works
Western Occupational and Environmental Medical Association
OPPOSITION : (Verified 5/31/11)
California Orthopedic Association
ARGUMENTS IN SUPPORT : Proponents argue that this bill
requires a long-overdue conversion of the workers'
compensation fee schedule to a schedule based on
Resource-Based Relative Value Scale (RBRVS) utilized by the
Medicare system. Proponents note that the existing system
is antiquated and based on valuations and assumptions that
are out-of-date and place primary treating physicians at a
disadvantage. Proponents also note that an RBRVS-based
schedule would be simpler and easier for employers and
payor to comply with.
ARGUMENTS IN OPPOSITION : Opponents argue that, while an
RBRVS-system has considerable merit, this bill
significantly increases reimbursement rates for physicians,
increasing costs on employers and would endanger efforts to
increase workers' compensation benefits for seriously
injured workers. Opponents also note that increasing
reimbursement rates for certain specializations could
create perverse incentives for unnecessary medical
procedures, which would not be beneficial for injured
workers. Finally, opponents argue that the DWC is
empowered to create a RBRVS-based Official Medical Fee
Schedule, and the future AD of the DWC should be given the
chance to do so.
PQ:kc 5/31/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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